UPDATE 3-Harley-Davidson profit rises; shipment forecast unchanged

* Q3 results in line with expectations

* Strong demand for bikes but top of full-year forecast at
risk

* Shares down 1.3 pct in early trading

By James B. Kelleher

Oct 22 Harley-Davidson Inc reported
higher quarterly earnings on Tuesday, lifted by the normal
summer surge in motorcycle sales in its key North American
market, but it kept the full-year forecast for its global
shipments unchanged.

The results, which were in line with expectations, suggested
U.S. consumer confidence - which hit a six-year high this summer
thanks to rising home and stock prices and the recovering job
market - remains resilient and that the appetite for
high-ticket, discretionary purchases remains high.

But Harley-Davidson said that sales in Europe continued to
be hurt by "ongoing macroeconomic challenges," particularly in
Southern Europe.

The company posted a third-quarter profit of $162.7 million,
or 73 cents a share, up from $134.0 million, or 59 cents a
share, a year earlier.

The results were in line with market expectations, according
to Thomson Reuters I/B/E/S.

"They basically did everything they said they would, and
they haven't changed their guidance," said Morningstar analyst
Jaime Katz.

Worldwide retail sales of Harley-Davidson motorcycles rose
15.5 percent, led by a 19 percent jump in North America, where
the company sells roughly two-thirds of its bikes.

Harley-Davidson said it still expected to ship 259,000 to
264,000 motorcycles to dealers and distributors worldwide in
2013.

But the company said the sales it believed lost in the
second quarter of this year because of an unusually cool, wet
spring in North America would not be recovered in the final
quarter of the year and would make it hard for the company to
reach the high end of its 2013 shipment guidance.

Harley-Davidson's worldwide shipment levels peaked at about
350,000 units in 2006, right before the U.S. housing bubble
burst and consumer demand for Harley-Davidson's motorcycles -
which are priced from $8,000 to more than $30,000 - skidded into
a ditch along with the broader economy.

The Milwaukee-based company, which announced a recall of
nearly 30,000 bikes earlier this month, said it expects to take
a $4.9 million charge in the fourth quarter to cover the cost of
the required fix.

In early morning trading on the New York Stock Exchange,
Harley-Davidson shares were down 1.3 percent at $64.74.

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